What is TAX?
Tax is a fee charged by the Government of a country on activity, income or a product. There are two types of taxes one is direct tax if tax is directly applied to a corporate income or a person. Second type is indirect tax which is charged to the goods or services. The objective of this tax is to finance a government expenditure on the welfare of the country like construction of roads, dams, road lights etc.
What is Rationalization?
Rationalization is a process in which restructure a process to increase the efficiency of the system. In tax rationalization means that restructuring of the tax policy through which the efficiency of the policy can be increased. This restructuring can add or remove some steps in the policy through
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It is imposed on a person not on a family as unit. The rates of tax increase with the progressive basis. This tax is imposed by federal level.
Capital Gain Tax
Capital gain tax is applied on disposal of a asset and the extra amount received through the sale. There are some exemptions too for example the family home. CGT is applied on the net gain of asset sale.
Corporate Taxes
Corporate taxes are paid by the companies on their profits and the flat rate 30 % tax is applied on the profit. Tax is calculated before the distribution of dividends. A tax credit is given to shareholders if they have paid the tax at corporate level.
Goods and services taxes
GST tax is applied on goods and services as a value added tax by the federal government at the rate of 10%. The GST was introduced in the year of 2000. There are some exemption on the goods for example foodstuffs, medical and education items.
Property taxes
The local government of the Australia main source of funding is property taxes. State can apply extra tax on high value properties in the form of stamp duties on transfers. The other type of tax applied on domestic homes is fire services.
Excise
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In Australia mostly tax payers have now equity investment other than the goods and service as in previous years. Due to globalization and e-commerce the more complicated rules of tax developed to deal with the new things or situations. There are many reforms in the Australian tax system in the history to improve its tax system. To achieve the objectives of a policy a more complex outcomes. Sometimes tax policy consideration extend beyond limits for example the objective of the tax policy is to provide the social security which required tax provisions. More complex financial working arrangement in Australia developed this sophisticated system of tax. Main consideration of the policy in the previous two decades was to remove poverty from the Australia. The complexity in the transfer system is the payment structure, who is eligible for the benefit and which income will be considered as taxable or non taxable due to complex rules and regulations. Small changes to the policy may bring a system which is inherently more complex and not consistent. New transfer system doesn't have to be complex than the previous. A small change by the government can increase the complexity of the system in the result of this small change. Incremental change in the system is more accepted because it does not disrupt the other system. There is trade off
Since the dawn of time for a society to work it needs to have a level of structure that applies to everyone and is understood by everyone. Australian legal system is broad and complex. It is the nature of the encompassing laws and regulations which reflect how people, organisations and governments behave on the many different levels of operation and these are created to make sure that everyone understands their rights and obligations. There are two sources of Law in Australia: Statute Law regulated by Parliament and comprise of legislations and acts; and Judge-made Law or Common Law where decisions made by judges are based on previous cases.
Whether or not to keep or discard the Bush era tax cuts for the wealthy, give tax breaks to the lowest tax bracket, and even throwing out the entire current tax code and replacing it with a simpler version, tax code and tax law has been a very controversial topic for the past few years. As it stands, the current tax code has over seventy two thousand pages, compared to the four hundred pages it had in 1913. There are many different stakeholders in this debate including taxpayers, corporations, businesses, etc. Americans for Tax Reform (ATR) is an organization that was “founded in 1985 by Grover Norquist at the request of President Reagan”(.N.p.). Their goal is to create and advocate for a simple flat tax,“...on the belief that they will provide a strong stimulus to investment, employment, and output” (Stokey 1). They promote their organization and represent taxpayers in all fifty states. Along with tax reform, ATR also advocates for individual health care, free trade, and spending transparency (.N.p.). Using very simple and easy to understand images, ATR is able to convey their goals and get information across to the general audience that visits their website.
Our current system of taxation is a varied rate percentage based on different income brackets. Many say that it violates our constitutional rights through unequal taxation. Multiple deductions, loopholes, special rates, and a complex system of regulations all characterize our Federal Income Tax System, prompting many to question why it is still being used (Peters, 2013). The current system although bringing in over $3 trillion, taxes income multiple times, and includes the taxing of estate, labor, savings, and investments (National Priorities Project, 2013). The system itself is complex with over 20,000 pages of regulations, requiring a massive filing system, which is set up and maintained by an even larger IRS, requiring over $225 billion in compliance costs (Hall, 2001). One can be hard pressed to find an advantage in the current system, other than the fact that it provides the government with an enormous amount of funds, and it has...
The federal income tax is broken up into different groups based on a tax payers marital status. Taxpa...
The distribution of wealth in Australia by Frank Stilwell & David Primrose (2007) http://evatt.labor.net.au/publications/papers/226.html accessed on May 17, 2011
In the United States, there are many different types of taxes. Some of them are goods and services, income, and property taxes (debt.org). The two most common taxes are the Flat Tax and the Fair Tax. Basically, Flax Tax is one income tax rate that everyone has to pay. Fair Tax is a proposal amendment to tax laws that removes the federal and state income taxes and replace it with a federal retail sale tax (Investorwords.com). Our current tax income system that we use is called Progressive Tax which is the tax system that takes a larger percentage from those who earn a higher income than those who earn a lower income (Investopedia.com). Out of all those taxes, the best one that I believe that can replace our current tax system is the Flat Tax because research has shown that it can be very beneficial for our economy today.
(TRANSITION: But before we get into all of that, the questions I asked you for my audience analysis revealed that not all of you are as riveted by tax policy as I am-shocking I know-, so I will clarify some of the jargon I will be using. First the progressive tax is a tax system where the tax rates increase with income earned. Let’s say the first tax bracket is set at 50,000 dollars, and the first tax rate is set at ten percent, and the rate above it is set at twenty percent. So, if you make 70,000 dollars, the first 50,000 will be taxed
The United States tax system is in complete disarray. Republicans and Democrats agree that the current tax code is complex, unfair, and costly. The income tax system is so complex; the IRS publishes 480 tax forms and 280 forms to explain the 480 forms (Armey 1). The main reason the tax system is so complex is because of the special preferences such as deductions and tax credits. Complexity in the current tax system forces Americans to spend 5.4 billion hours complying with the tax code, which is more time than it takes to manufacture every car, truck and van produced in the United States (Armey 1). Time is not the only thing that is lost with the current tax system; Americans also lose great deal of money complying with the tax code. Resources that are currently wasted on record keeping, filing forms, learning the tax code, litigation, and tax avoidance. The cost of complying with the current tax code totals about $200 billion annually, or $700 for every man, woman, and child in America (Armey 1). The overwhelming consensus that the current tax system is inadequate has ignited the search for tax reform. There are numerous proposals for tax reform; one particular proposal brought forth by various conservatives is the idea of national flat rate income tax. The idea is to replace the current income tax with a single rate that everyone pays.
Protects the taxpayer during hard times, when income is reduced, the tax rate also become shifts to a lower bracket.
Taxation has always been a major controversy. Just like any major corporation, the government is constantly looking to raise revenue. The easiest and fairest way to do this is by taxing the people. However, how the people will be taxed is always an issue.
The Australian Legal System has a rich and detailed history dating from 1066. Law is made in Parliament. We have four sources of law and three courts with different jurisdictions that interpret the law when giving out justice. Important doctrines act as the corner-stones of our legal system. There is a procedure in the courts for making appeals. Separation of powers exists between officials in the courts, the parliament and the Executive. Everyone in Australia is treated equally under the Rule of Law, no matter their office or status. The Law is always changing as society changes, but it can never be perfect and cannot please everyone.
The use of taxes is one of the government's favorite ways to make its presence known in the economy. While this method seems blatantly obvious, many of the ways the government uses the money collected by taxation is not. Some of the money it takes is used to fund other programs designed to "protect" consumers and to "create" jobs. Be...
The purpose of this paper is to illustrate the layout of taxation. I will differentiate the types of taxes and the roles that they serve currently. Subsequently, I will explain what equity, efficiency, effectiveness and transparency (EEET) are and show how they apply to taxation as a whole. Lastly, I will conclude how the EEET applies to the four tax types.
The famous literature on principles of taxation was embodied in Adams Smith “Canons of taxation”. Since then, economies have adopted (and adapted where necessary) these basic principles for what is regarded as the most important tool of fiscal policy.
The government use of taxes plays a crucial role in today’s economy as well as personal finances, it has and will continue to leave its mark on the world we live in.